The pair continues trading at its local lows amid weakening in the Euro , which remains under pressure prior to the ECB meeting. According to forecasts, the regulator will keep its interest rate unchanged but will announce its readiness to further ease in the nearest future. At the same time, additional uncertainty to ECB’s decision comes from a growing problem in the Italian banking sector, which could worsen the situation of UK’s departure from the European Union. According to the IMF estimates, the total size of bad debts on banks’ balance sheets amounts to around 360 billion Euro .
In addition, the pair is pressured by strengthening in the Dollar that receives support from strong macroeconomic statistics from the US. The latest data increased the probability of an interest rate hike by the Fed before the year-end.
Support and resistance
The nearest is at 1.0984.
The nearest is at 1.1023.
Short positions can be opened from the level of 1.0984 with the target at 1.0750 and stop-loss at 1.1023.